On January 29, 2021, Ministerial Agreement No. 03-2021 “Regulations for the regulation, supervision and sanction of Foreign Agents” was published, which establishes the registration requirements and procedures, the powers of the competent authorities, the rights and obligations of regulated subjects, the catalogue of infractions, sanctions and appeals.
It establishes the obligations that regulated subjects have regarding to the Foreign Agents Registry and in this article, we explain what they consist of:
1- Register in the Foreign Agents Registry of the Ministry of Government: The first obligation refers to the need to complete a free registration process before the authorities of the Ministry of Government, in which the regulated subjects must comply with the requirements established in Article 7 of the Regulations, subsequently the Foreign Agents Registry will review and verify the information provided within a period of ten days and upon finding everything right, it will notify the foreign agent and proceed with its registration, granting it a unique number, issuing the registration certificate and giving it the access codes to the web portal.
2- Carry out activities in accordance with the purposes and objectives established in their registration documents, articles of incorporation and bylaws: Foreign agents cannot carry out activities other than those established in the documents that prove their existence and such activities cannot be executed without its prior registration in the web portal.
3- Keeping and custody of the NURAE and password assigned by the Foreign Agents Registry, in order to guarantee that the information provided by the regulated person is personal and confidential, and should not be shared with third parties: Upon completing the registration process, foreign agents will receive a Unique Number of Foreign Agents Registration (NURAE in Spanish), which is for exclusive use of them as well as the access data to the web portal, which should not be shared or disclosed, this in order to guarantee that only the regulated subject makes the corresponding reports.
4- Report and update before the Competent Authority, each time there are changes in the foreign agents information and documentation about: address, contact information, amendments to the minutes or articles of incorporation and bylaws, members of the board of directors, powers of representation, identity documents of the legal representative, change of the principal or any other necessary information for the Competent Authority, this update must be carried out within a period of no more than five business days from the occurrence of the change, and the corresponding supports must be registered or presented.
5- Inform to the Competent Authority in advance of any transfer of funds or assets that they are going to receive directly or indirectly from a foreign entity, natural persons, governments, companies, agencies, foundations, organizations, companies or foreign associations of any nature, to develop their activities as a Foreign Agent, having to state in said report the use and destination of these: In this regard, it is necessary to emphasize that once the transfer of funds or assets and the destination od the same has been reported, it cannot change without prior notice to the competent authorities.
6- Provide the identification data of the foreign government or governments, foreign political parties and their related entities, natural or legal persons that finance, provide funds or in any way facilitate economic and material means to carry out their work as a Foreign Agent: This information will be public in accordance with the provisions of Article 9 of Law 1040, Foreign Agents Regulation Law
7- Carry out financial operations to receive any transfer of funds or assets of any type or nature, through formal channels and report it before the Competent Authority, in case of material goods from abroad, they have to comply with customs legislation.
8- Submit monthly reports and final execution report of the activities related to their work as Foreign Agents: The first report must contain the detailed and supported information of the expenses, payments, disbursements, contracts and actions related to the foreign agent activity, while the final report must contain the consolidated information of the entire execution of the reported donation.
9- Provide the information required by the competent authorities about its objectives and purposes, bylaws, activities, donors, beneficiaries, source of financing from abroad, administrative and financial operations, among others.
10- Implement internal measures in order to guarantee that the funds, goods and resources to be received do not come from illicit activities, nor are they used for illicit activities.
11- Implement measures to know their donors, beneficiaries and associated legal entities, so the foreign agents should not receive donations, from anonymous sources or people, and must:
- Verify and document the identity and good reputation of their donors.
- Verify the identity of their beneficiaries and / or final destination of the donations.
12- File, preserve and conserve the information and documentation in physical and digital form of their performance as a Foreign Agent and ensure that it is available to the Competent Authority, for a minimum period of five years:
- Records of local and international transactions, counted from the date of the transaction:
- Information about the identity of the donors and their beneficiaries;
- Documents and information regarding to their work as a Foreign Agent.
13- Refrain from intervening, financing or promoting business, activities or issues of internal and foreign policy, or activities that results in political proselytism: The carrying out any of these activities will be considered a very serious offense and would be sanctioned with fines ranging from US $ 5,000.00 to US $ 500,000.00, in addition to the cancellation of the registration as a foreign agent, the request for cancellation of the foreign agent legal personality and the intervention of funds and assets.
14- Refrain from Financing or promoting financing to any type of organization, movement, political party, coalitions or political alliances or associations that develop internal political activities in Nicaragua: Carrying out any of these activities is considered a very serious infringement and would be sanctioned with fines ranging from US $ 5,000.00 to US $ 500,000.00, in addition to the cancellation of the foreign agent registration, the request for cancellation of its legal personality and the intervention of its funds and assets.
15- Comply with the obligations established in Law No. 1040 and refrain from taking actions that the same prohibits.
16- Comply with the administrative provisions issued by the Competent Authority.
Consequently, foreign agents must diligently fulfill with the obligations established in the law and in the regulations since, if they do not do so, the sanctions to be imposed could mean their closure and cessation of operations.
If you have any questions about it, do not hesitate to contact us.